Martin Midstream Partners: A 9% Yielder I Plan To Add To My Income Portfolio On Next Sell-Off

It appears from pre-market futures that the trading week will open on a down note after Friday's large rally on low volume. I will be using any pullback to add to my income portfolio by adding another 9% yielder in the energy MLP space, Martin Midstream Partners (NASDAQ:MMLP). This entity has sold off more than 10% recently along with other high yielding entities as well as an announcement that it would raise additional funding by pricing new units. MMLP is now offering a nice entry point at $31 a share.

Martin Midstream Partners L.P collects, transports, stores, and markets petroleum products and by-products in the United States Gulf Coast region. The company owns or operates 27 marine shore based terminal facilities and 12 specialty terminal facilities among other assets.

The entity has consistently grown its distribution payouts by a few pennies more a quarter per year over the last decade. Distribution has slowed over the last few years (See Chart). However, given its growth prospects and streamlining efforts (see below), I think these distribution payouts will accelerate in the years ahead.

(click to enlarge)

Valuation, Growth, Catalysts & Analyst Opinion:

Only three analysts cover MMLP. They all have price targets above the current price and are packed into a tight range (Low Target: $35.50, High Target $36).

The company is using divestitures to reduce its exposure to natural gas gathering and processing. Martin will be able to focus more on its oil storage, sulfur services and marine transport businesses which will help to streamline the firm.

Revenue growth is expected to come with a 4% increase in FY2012, but analysts expect that growth will accelerate to 12% in FY2013.

Earnings are on an upward path. MMLP earned just 92 cents a share in FY2011 but is on track for around $1.40 in EPS for FY2012. Analysts have over $1.70 per share pencil in for FY2013.

Insiders & Technicals:

Insiders have been small but frequent buyers over the last month or so.

MMLP is selling just over longer term technical support levels (See Chart).

(click to enlarge)

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MMLP over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

We only use your contact details to reply to your request for more information.We do not sell the personal contact data you submit to anyone else.

Thank you for your interest in Seeking Alpha PROWe look forward to contacting you shortly for a conversation.

Thank you for your interest in Seeking Alpha PRO

Our PRO subscription service was created for fund managers, and the cost of the product is
prohibitive for most individual investors.
PRO Alerts is our flagship product for individual investors who want to be faster
and smarter about their stocks. To learn more about it, click here.
If you are an investment professional with over $1M AUM and received this message
in error, click here and you will be contacted shortly.

Thank you for your interest in Seeking Alpha PROWe look forward to contacting you when we have an individual investor product ready!